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Opening the vault: Data, research, and improved policymaking in South Africa

March 2017

By James Stewart

Policymakers often work in the dark, as they try to make real impact on people’s lives. If you don’t have good data, being worked on by good researchers, it can be hard to know whether policy efforts are truly making a difference. In South Africa one key area where data and evidence have been missing is on firms and employment. The National Treasury, together with UNU-WIDER and SARS, have embarked on a multi-year programme to address this problem.

The desk at the Treasury

On the 20th floor of the National Treasury in Pretoria sits a computer which contains a pool of data: tax data on each firm, data that are already being collected yearly by the South African Revenue Service. The solution to the firm data problem in South Africa then, was not to generate new data, but to follow international best practice and open up this existing data to researchers with the hope that research can help lead to better policy. This newly available data has the potential to be a game changer for research - and policy in the country.

According to Duncan Pieterse of the Macroeconomic Analysis Unit at the National Treasury, “what this data allows us to do is to look back in time and understand what has been the impact of government policy. Did we get the value for money we expected to get, and how can one redesign those programmes going forward to make better use of these resources?”

The documentary highlights the role UNU-WIDER has played in the project. The institute provided both international expertise and a connection between researchers and policy makers. This connection gave both sides the confidence that the data could be used to answer important policy questions.

A long-term aim of the project is not only to evaluate and improve policy - but to build capacity, both within the research community in South Africa and within the policy departments of the South African ministries. In this sense, it is one of the most innovative projects of its kind in Africa. With success in South Africa - other countries in the region are looking to follow.

Konstantin Makrelov, Chief Director of Modelling and Forecasting at the National Treasury points to some areas in which the project is already having an impact, “the work on the Employment Tax Incentive, on the learnership allowance, the work on capital vs employment incentives and how they affect labour costs has directly fed into the Treasury’s policy decisions.”